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Graduating on a Budget: New Grads' First Cars Don't Have to Break the Bank

CarGurus Offers Young Car Buyers Guidance on How to Find a Great Used-Car Deal

CAMBRIDGE, Mass., May 9, 2012 -- The average debt load on college graduates jumped 24% to $16,932 between 2000 and 20101. Recent grads who need to buy a car as they begin their professional life should not add to that burden by overpaying for their first set of wheels. Editors at CarGurus, the auto research and shopping site (www.cargurus.com), have identified a selection of lower-priced used models for young buyers to consider and some important consumer awareness tips for finding these and other great deals.

What to Buy on a Tight Budget

“We advise grads on a tight budget to seek out cars that are around five or six years old and to make fuel-economy ratings and safety features a priority in addition to price,” said Langley Steinert, founder and CEO of CarGurus. “Narrow your budget and must-haves before you even start looking—and stick to them.”

With market values between $9K and $12K (with typical mileage), these 2007 and 2008 cars will fit starter-salary budgets and deliver on fundamental safety and efficiency goals. The cars selected also get high user ratings from the CarGurus online community. Editors say with smart online price shopping, buyers should be able to find deals priced below the instant market value shown below.

Primary Use Car (Trim) MPG (city/hwy) Standard Safety Features IMV* (based on avg. mileage for currently available listings)
Commuting to and from work 2008 Kia Rio (LX) 25/35 Front/side airbags. ABS was optional. $9,800 (59,700 miles)
2007 Toyota Yaris (2 Dr. Hatchback) 29/35 Front airbags. Side air and ABS were optional. $10,000 (66,800)
2007 Hyundai Elantra (4 Dr. GLS) 25/33 Front/side airbags and ABS. $10,200 (77,000)
2007 Toyota Corolla (CE 4 dr) 28/37 Front airbags. Side air and ABS were optional. $11,200 (67,400)
Commuting and drives with friends/cargo 2007 Ford Escape (XLS) 20/24 Front airbags. Side air and ABS were optional. $11,200 (77,900)
2007 Honda Fit (Base) 27/35 Front/side airbags and ABS. $10,800 (74,000)

*CarGurus' IMV (Instant Market Value) is based on an analysis of historic and current listings and factors specific details including make, model, trim, year, mileage, options and accident history. The IMV noted here was calculated based on the average mileage for currently available national listings for that car.

How to Find the Best Deals

Knowing the deals are out there is a start, but being a savvy shopper is important to getting the best price possible. CarGurus editors suggest these shopping tips for young buyers:

  1. Know your options. The trim and options of any used model will impact price. If you can live without heated seats, alloy wheels (believe us, you can) or other higher-end options, you'll likely save some money. That said, check standard safety features to be sure the car fits your goals. For example, side airbags might not come standard on some models, and that's a feature worth seeking out.
  2. Do your (price) homework online. There is a lot of variability in how dealers price used cars, and since no two used cars are exactly alike, comparing listing prices can be a challenge. Take advantage of CarGurus' free online listings comparison search engine, which will crunch and compare prices and specs to direct you to the best deals from the most reputable dealers.
  3. Look outside your zip code. Expand your search radius to see if you can get a better deal further away from where you live. If so, be sure to check reviews on the dealership and get as much specific information on the car (including the vehicle history report) before you make a trip to check it out.
  4. Be patient. Used-car prices tend to be highest in spring and summer months. According to the CarGurus Used Car Price Index, the average price of a used car is up nearly 5% since January 1. Prices tend to be lower in winter months, and that means you could find considerable savings if you can postpone your purchase.

About CarGurus

CarGurus (www.cargurus.com) is a leading online automotive destination focused on making the car shopping and research experience more transparent for consumers. CarGurus' free listings search tool analyzes prices on millions of available cars and enables consumers to quickly find the best local deals from the best rated dealerships. Unlike many other listings sites, the search results rankings are unbiased by listings providers.

Located in Cambridge, Mass., CarGurus was founded by Langley Steinert, co-founder and former Chairman of TripAdvisor.

1. Trying to shed student debt, Josh Mitchell, The Wall Street Journal, May 3, 2012

Amy Mueller
CarGurus
617-216-2900
pr@cargurus.com

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